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Our last post discussed a case in which the City was successful in enjoining Smart Apartments from advertising for transient (i.e. less than 30 day occupancy) rentals. On this NYC marathon weekend when the City is virtually flooded with tourists here for very short periods, we thought it appropriate to revisit this issue.

The Environmental Control Board (the “ECB”) has now decided that the short-term rental of an apartment (less than 30 days) via websites such as Airbnb is legal, so long as a permanent occupant of the apartment is present. Apparently the dire issues of safety and nuisance, which the City had argued in another case is the purpose of the regulation, were sorted out through the presence of a roommate. Arbitrary? You be the judge!

The ECB decision overturned a $2,400.00 fine imposed on the owner of a condominium unit whose tenant used Airbnb to rent a room out to a Russian tourist for three days. According to the original decision, the Airbnb user was in violation of the Administrative Code of the City of New York § 28-118.3.2 because that short-term rental was contrary to law.

The relevant part of the Multiple Dwelling Law, Article I §4(8)(a) (the “MDL”) and the Administrative Code of the City of New York § 27-2004(a)(8)(a) (the “Code”) provides that a Class A multiple dwelling shall only be used for permanent residential purposes, which is defined as occupancy by the same person or family for 30 consecutive days or more. However, the MDL and the Code also states that occupancy for less than 30 consecutive days by other persons living within the household of the permanent occupant such as house guests, or lawful boarders, roomers or lodgers is not inconsistent with the occupancy of a dwelling unit for permanent residence purposes. The MDL goes on to define a boarder, roomer or lodger in part as “…a person living within the household who pays a consideration for such residence…”

Here, the ECB found that the tourist’s three day occupancy of the apartment was not illegal because the tourist shared the apartment with the Airbnb user’s roommate. In other words, according to this case, a would-be illegal short-term renter may legally rent a Class A dwelling unit for less than 30 consecutive days so long as a permanent roommate is present at the time of the occupancy. It is irrelevant that the roommate and the tourist were strangers, as the MDL does not require the individual renting the apartment to have a personal relationship with the permanent occupants of the residence.

It should be emphasized that the exception to the 30 day rule, which this decision suggests, is tailored to a situation where at least one permanent resident of the apartment is occupying the apartment at the same time as the renter.

We believe that the MDL provides a distinction without a difference and this case only serves to amplify the absurdity of the law, demonstrating that it is not based in reason or reality. As we previously stated, it does not make sense to prohibit an individual from renting his or her apartment for 29 days but not for 30 days. It is similarly irrational to prohibit someone from renting an apartment for 30 days unless a legal tenant is present. These ambiguities make us wonder what the actual purpose of this law is and if it is regulating the people it was designed to regulate?